Market Forces or Exploitation? How Low Is Too Low For Missouri Worker Wages?

(St. Charles, MO) – Is it the result of the free market or greedy corporations?

Organized labor activists say thousands of Missouri workers are not being fairly paid for low-wage work at fast food restaurants. They’ve organized walkouts in some Missouri cities twice this summer.

These workers generally get paid minimum wage. Nationally, that’s $7.25 per hour. In Missouri, it’s $7.35 per hour, so activists are demanding a doubling of salary for low-wage employees.

Rev. Martin Rafanan is with Missouri Jobs With Justice, which is part of the organizing effort of the strikes, explains the demands.

“What they are asking for is a higher wage, a wage that takes care of the basic necessities of their lives and the right to form a union without retaliation. When I say meets the basic necessities of their lives, it’s a wage that we might call a living wage.

“That wage is really, in our community, above fifteen dollars an hour. So, their demand is for that type of wage.”

Rafanan says, at least for right now, that demand is for businesses to voluntarily agree to the wage increases but they also have their eye on Missouri’s minimum wage law and want to see that changed if they aren’t successful with the strikes.

“We will follow every path we possibly can to get workers and working families a better deal in Missouri. If that means raising the minimum wage, of course, we will work for that.”

Missouri Jobs With Justice has been lobbying for an increase in the state’s minimum wage for several years.

Part of the argument for increasing the pay rate of employees, Rafanan says, is self-sufficiency. He says that despite billions of dollars in the companies’ profits worldwide, all taxpayers are making up the difference when workers don’t get what he believes is fair pay.

“We subsidize those profits because these families can’t make enough to survive and we, as citizens, end up paying for food stamps, health care, housing support and many other kinds of support.”

The walkouts happened once in July and once in late August and, according to Rafanan, more strikes are on the way.

“We’ve just started in this work. Workers are going to have to go a lot farther in building their power both in terms of members and geography in making headway.”

The Show Me Institute’s David Stokes thinks the protests are a shortsighted approach that would hurt many of those who are supposed to be helped by the proposed changes.

“Sure, some of these workers would see their wages increase, perhaps substantially. But that gain is going to be more than offset by the substantial number of workers who will lose their jobs.”

While labor and social justice advocates says pressing business into paying workers more will kick start the economy and get more workers off the public dole, Stokes thinks what is being demanded would likely have the opposite effect.

“There are market rules for what people are going to pay for labor and what people’s labor is worth and whatever we want doesn’t change how it is. How it is is that if you increase substantially the cost of the inputs in the fast food business, fewer people are going to buy fast food because it’s going to be a lot more expensive and that’s going to cost some people jobs.

“If you think we’re subsidizing them now, well at least they have a job and are paying for a substantial portion of themselves through their work. If they are unemployed because we’ve dramatically shrunk the fast food industry through substantial minimum wage hikes, then we’re going to be subsidizing them a lot more.”

Possibly the biggest chasm between the viewpoints is about the role of these low-wage jobs in the economy and culture. Those, including Rafanan, pushing for a “living wage” for fast food workers and those in similar employment say the jobs should become middle class jobs that support working families.

Stokes not only believes that is unrealistic and not the role of these jobs in the economy. Despite the small paychecks, he says, there is still a benefit to having them in place.

“Job training is such a huge part of this discussion, here. The fact is that minimum wage jobs allow opportunities for employment and to learn skills for a large number of young people from poorer backgrounds.

“[They] might not have the education and don’t have the opportunity to go to college and come out with a degree but they need work experience and they need job opportunity and that’s what many of these fast food jobs provide.”

Rev. Refanan says the discussion should be more than a debate over economic data.

“I believe Missourians believe that if you work full time, you should have a wage that covers the basic necessities of your life.”

There’s a bigger people-based picture in the issue to Stokes as well.

“Trying to benefit low-wage families by increasing the minimum wage just isn’t going to work. It will benefit some but, for others, it’s going to kick the rung off the ladder.”